That’s pretty ironic, since the people most guilty of grandstanding may be the feds themselves.

Theranos, a high-profile Palo Alto startup founded by superstar entrepreneur Elizabeth Holmes, is no doubt a hot mess. The company, which investors valued at $9 billion, has run afoul of regulators for not properly managing one of its laboratories. Moreover, critics say Theranos’ technology, designed to diagnose a host of diseases from a small amount of blood, simply does not work. (A Theranos spokeswoman declined to comment but did confirm the criminal probe.)

Before running into trouble, the company also boasted a board of directors heavy on former military officials and secretaries of state but light on medical and regulatory experts — people who might have advised Theranos on how to properly deal with investigators from the Centers for Medicare & Medicaid Services, which recently found that practices in its California testing laboratory “pose immediate jeopardy to patient health and safety.”

Sounds like serious stuff. A shutdown of the lab may well be in order if Theranos doesn’t clean up its act. But a criminal probe? I’m no lawyer, but hyperbolic pitching of a new technology’s potential is not necessarily a crime. If it were, we’d need to build a few new prisons in Silicon Valley. Even the Securities and Exchange Commission’s parallel investigation of Theranos seems kind of odd, since the agency normally oversees public companies whose shares are widely traded on the market. Theranos is private, and a once-rumored IPO seems unlikely now, given its other troubles.

The Bureau of Justice Statistics, which is part of the Justice Department, does not break down inquiries between public and private firms. But according to the agency, business fraud cases accounted for only 9.1 percent of all federal investigations and prosecutions in 2012, the most current data.

The feds are also investigating Theranos for allegedly misleading government officials, possibly laboratory regulators. These cases are even more rare: Just 3.5 percent of investigations and prosecutions in 2012 were of a regulatory nature.

Moreover, while the SEC typically fines a company for breaking the law, the Justice Department wants to put someone in prison. Last fall, Attorney General Loretta Lynch said prosecutors will focus more on holding top executives, not just the company, accountable for fraud. The move was prompted by the feds’ failure to prosecute people responsible for the housing crisis that resulted in the great recession.

High bar

But winning convictions against individuals in these cases is pretty tough, absent a smoking-gun document that clearly shows an executive intended to commit fraud. Simply proving someone was reckless or negligent is not enough, former federal prosecutors say.

In other words, prosecutors already must meet a high standard to prove that someone like CEO Holmes intentionally misled investors. Which begs the question of why the Justice Department, with its finite resources, wants to pursue this particular case.

There’s also the question of who are the supposed victims.

In most corporate fraud cases, we’re talking about ordinary people with 401(k) plans who owned shares in publicly traded companies through their mutual funds. With Theranos, the investors the company allegedly conned are sophisticated venture capital firms like ATA Ventures, Continental Ventures, and Draper Fisher Jurvetson — people who are supposed to know what they’re doing.

In the end, we must follow the money. The Justice Department and the SEC are most likely willing to target Theranos because the company is a unicorn — a startup that has yet to go public but boasts a multibillion dollar valuation. One reason unicorns are worth so much is because these companies are starting to attract money from investors normally content with stocks and bonds but who now want a piece of hot, pre-IPO startups: pension funds, endowments, and mutual funds.

But if that’s the case, then Zenefits would seem like an easier target than Theranos. The San Francisco maker of human resources software, once valued at $4.5 billion, has already admitted that it broke the law when it allowed people to sell insurance without a license. The company also said founder Parker Conrad resigned as CEO after the board discovered he had created a software program that allowed people to cheat on an online, pre-license course.

And let’s face it: Insurance is pretty boring, especially when compared to a revolutionary blood diagnostic technology that strives to change global health care as we know it.

“Prosecutors are probably trying to make an example out of Theranos,” Havian said. “You don’t want to go after a small company that’s not sophisticated. You want to go after a company which should have known better.”

Going too far

But a criminal probe seems like overkill. If anything, Theranos is guilty of exaggeration and cutting regulatory corners. So let agencies like the Centers for Medicare & Medicaid Services, the Food and Drug Administration and the Federal Trade Commission deal with the company.

“You got to do the hard work,” Robert Nussbaum, chief medical officer of San Francisco diagnostic company Invitae, previously told me. “You got to do the years of work and clinical studies. You can’t get five people together and jump-start it into a (multibillion dollar) medical company. It just doesn’t happen.”

“Theranos created a lot of public relations but with little transparency,” he said. “People didn’t really know what they were doing. It was kind of a black box.”

Prosecutors instinctively like to say they go after criminals no matter the circumstances. But we know that’s not quite true. The Justice Department only has a certain amount of time and money, so they carefully choose big-impact cases.